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Every day I read the Wall Street Journal, the Financial Times, the New York Times, and Handelsblatt. Then I skim other finance papers online. I also read several finance blogs. Each day I ask myself what is the most important news story of the day. Usually I vote for one that has the chance of making me and my clients some money, or avoiding a loss, or shorting to make money...you get the idea, it's usually all about the Benjamins. But sometimes the most important story is one about the integrity--or lack of integrity--in our financial system.

Part of our financial system is the "support" network that surrounds it. The Congressional Budget Office (CBO) is one of the links in that network. Today's top story involves the CBO and one of its former employees, Lan T. Pham, Ph.D., fired after writing about growing foreclosure problems due to robo-signing and the fact that the ownership of mortgage loans isn't clear due to the shortcuts taken to serve the "securitization" process. This poses fatal flaws for securitization, since ownership of the loans is in doubt. Moreover, this has implications for systemic risk in the financial system.

This knowledge isn't unique or new. What is new is that Dr. Pham brought this forward to the CBO and apparently this information is being suppressed and denied by the CBO and in Congressional reports.

I didn't read her story in mainstream media. I read it at ZeroHedge.com, and now you are reading about it at Business Insider. ZeroHedge is run by Tyler Durden, the pseudonym used by several anonymous contributing writers. I doubt that any of them is Brad Pitt, who played this character in Fight Club, but I wouldn't want to underestimate Mr. Pitt, so I apologize in advance if I'm wrong in that assumption. More on that topic later.

Dr. Pham starts her story with a bang:

Following the Wall Street Journal story, "Congress's Number Cruncher Comes under Fire," I realized that the true nature of the issues would not come out. Therefore, I am making public the letter that I wrote to Senator Grassley (Feb. 23, 2011) regarding circumstances that led to my firing after 2.5 months by the Congressional Budget Office (CBO), particularly my writing about mortgage fraud and its roots in mortgage securitization that CBO sought to deny was a problem.

You can read the rest of her story here. I sometimes disagree with posts on ZeroHedge. (Disclosure: ZeroHedge has occasionally posted my work. I almost always agree with myself, although new data/information may either add more evidence to confirm my original views or may inspire me to change my views.) Nonetheless, I recommend people read it, because it lets free speech rip, and it's where the finance world goes for a back alley brawl. One wades into this fight club knowing the sparring partners have an agenda. Caveat lector. But that goes for "mainstream media" in spades, too, so this shouldn't deter you. The overwhelming value of this site is that it airs different viewpoints--that's what makes a market--and it sometimes brings forward unique stories one cannot find anywhere else. Dr. Pham's story is just one example.

The Danger of Underestimating Brad Pitt and the Naked Prey

I told you I'd get back to Mr. Pitt. I doubt his day job and family responsibilities leave him with the time or inclination to be a financial blogger, but I'm not in the business of underestimating others.

Yesterday, an anonymous financial blogger using the name Arthur Cutten, aka Jesse, the site owner of the excellent blog, Jesse's Cafe Americain, bemoaned KPMG's publication of the names, addresses and debt holdings of customers harmed by MF Global's crimes and subsequent bankruptcy. Retail customers seem to be prey.

We human beings often underestimate each other and we stereotype too much. When people rouse themselves they do amazing things. If the proverbial Sleeping Giant reawakens in the United States, we can see rapid positive change.

Many people don't remember a time when everyone could smoke anywhere they pleased and it was the people who asked them to extinguish their cigarettes that were viewed as jerks. Today the situation is quite different in the United States. It took a while, but the truth about the risks came out and we as a nation changed our habits. The same thing can happen in finance.

My response to Jesse was that one should never underestimate prey, and one should even assume they are prey. The film, the Naked Prey, is astonishing on many levels. The fiction backstory is that through underestimating and stereotyping each other, two groups of people dehumanized each other and created their own mini-war and personal tragedies.

The real life backstory is that when it was filmed, Cornell Wilde was 54 years old. It's a physically demanding role, and any assumption one would make about a 54-year-old being too old to convincingly play this part would have been wrong.

Dr. Pham's story is an important story of a woman who appears to have been wronged. But when you read her story, you'll see that she is not prey. She is not down and out, and any assumption one might have about people taking this sort of thing lying down would be wrong.